* Adjusted Q4 EPS $1.99 beats Street view of $1.59
* Q4 revenue $12.73 bln, up from $10.44 bln year ago
* Good grain merchandising results partly offset by sugar
* Shares fall 2 pct on weaker sugar segment outlook
(Rewrites; adds quotes; updates share price)
By Karl Plume
CHICAGO, Feb 10 Agricultural processor Bunge
Ltd (BG.N) reported better-than-expected quarterly results on
Thursday, but its shares fell 2 percent after it signaled its
sugar business in Brazil might be slow to recover from a 2009
White Plains, New York-based Bunge, said it would no longer
issue earnings guidance because volatility in the commodity
markets have made forecasting increasingly difficult.
Still, it expects its business to remain strong on rising
global food demand and supply imbalances that boost its grain
Bunge, Brazil's third-largest sugar producer, said
sugarcane volumes available to its mills will increase in 2011
from the prior year's drought-hit supply, but the projected
milling volume was below its earlier estimate.
"Earlier in the year they said they might process about 19
million metric tonnes of sugarcane and now they're saying about
17 million," said Jeff Stafford, an equity analyst with
"In addition to the lower volume, now they're going to have
lower margins because the fixed costs are going to be spread
out over a smaller base," he said.
The sugar segment outlook overshadowed Bunge's
better-than-expected fourth-quarter earnings on a strong grain
in merchandising profits, which gave shares at boost early in
Bunge's grain marketing, storage and transportation
operations benefited from rising global demand for food amid
thinning stocks and the company said it was able to withstand
highly volatile commodities markets with favorable futures
Bunge reported net profit of $292 million, or $1.95 per
share, available to common shareholders. On that basis, it lost
$28 million, or 21 cents per share, a year earlier.
Excluding one-time items, earnings were $1.99 per share,
handily beating the average analyst estimate of $1.59 per
share, according to Thomson Reuters I/B/E/S.
Revenue rose to $12.73 billion from $10.44 billion, topping
the average analyst estimate of $12.10 billion.
PROFIT UP ON AGRIBUSINESS
Bunge's agribusiness segment, its largest, posted a $377
million profit in the fourth quarter, up sharply from $65
million a year earlier when drought-thinned South American
oilseed supplies weighed on results.
Reduced sugarcane processing in Brazil and challenges with
the start-up of two mills during the quarter resulted in a $56
million net loss for Bunge's sugar and bioenergy segment. The
segment lost $5 million a year earlier.
Earnings in edible oil products narrowed to $45 million,
from $114 million a year ago. Milling products segment results
slipped to $14 million on a one-time impairment charge, down
from $18 million a year earlier.
Improved margins offset lower volumes in Bunge's fertilizer
segment, which earned $1 million in the quarter. A year ago,
poor demand and weak margins resulted in a $174 million loss in
Bunge's shares were down 2 percent at $68.39 on the New
York Stock Exchange at midday.
(Reporting by Karl Plume; editing by Lisa Von Ahn, Dave
Zimmerman and Andre Grenon)